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Schools and colleges just got the green light on electric car salary sacrifice! We’ve outlined the update below, and you can book directly to talk one-to-one with our partner The Electric Car Scheme by clicking here.
If you work in education, or you know someone who does, new government guidance has just opened up electric car salary sacrifice to a huge part of the public sector that’s been shut out of it for years, and it could mean thousands of teachers, teaching assistants and support staff making the transition into green driving for a fraction of what it would cost them to lease privately.
If you’ve never come across “salary sacrifice” before, here’s the quick version. A salary sacrifice car scheme lets you give up a slice of your gross salary, before tax and National Insurance, in exchange for a car. Because the payment comes out before you’re taxed on it, the car ends up costing you less than leasing the same vehicle privately with your take-home pay.
Electric cars benefit the most from this. HMRC’s Benefit in Kind tax rate for fully electric cars is just 4% this tax year, capped at 9% by 2029/30, against 17% to 37% for petrol and diesel. That gap is why EV salary sacrifice has taken off, with most employees saving 20% to 50% versus a personal lease, at little or no cost to the employer.
Multi Academy Trusts, or MATs (groups of schools under one trust) and colleges are publicly funded, and that’s kept them locked out of new EV schemes for years. A 2023 pause was followed by a requirement, from September 2024, for trusts to get explicit DfE approval before enrolling any staff.
That has now changed; on 8 July 2026, the DfE published new guidance lifting the approval requirement for most trusts and colleges: colleges from 1 August 2026, academy trusts once the Academy Trust Handbook 2026 takes effect this autumn (check the guidance on GOV.UK for your exact date, it has shifted since first announced).
The test: no financial liability to the trust, for example if a staff member resigns or is made redundant mid-lease, this means no DfE sign-off is needed. Any liability, or a trust under a Notice to Improve, still needs approval. Clearing that bar means a master hire agreement rather than individual staff contracts, clear written liability terms, a provider that chases any issues directly, and a National Insurance and pension savings buffer.
It’s a bigger deal than it sounds: over 60% of pupils in England attend an academy, across 2,050+ trusts and 208 colleges, meaning hundreds of thousands of staff have had no route into this benefit until now.
Make the case with three points:
It’s proven, too. Shaw Education Trust, which runs over 30 academies, already offers a scheme through The Electric Car Scheme, with staff saving 20% to 50%.
One honest caveat: Teachers’ Pension Scheme members should check with payroll first, since a lower salary now can mean a very slightly smaller pension later. Fine for most people mid-career, worth advice if you’re close to retiring.
Easiest first step: send HR The Electric Car Scheme’s guide for trusts and colleges alongside the DfE guidance, and ask if a compliant scheme could work for you.
Check any scheme clears the no-liability bar first, which means comprehensive, insurance-backed protection from day one covering redundancy, resignation, sickness and dismissal. The Electric Car Scheme’s Complete Employer Protection is built for exactly this test.
Then get the structure right: a master hire agreement, clear liability terms, an NI and pension buffer, proportionate scale (one EV per employee), an annual board review, and eligibility rules like staying above minimum wage post-deduction and holding a valid UK licence. Take your usual legal, HR and audit advice, and brief your board early. The Electric Car Scheme’s business development team can guide you through the process here.
Once you’ve chosen a provider, most trusts are live within weeks. The Electric Car Scheme already supports trusts like Shaw Education Trust and can handle due diligence, board papers and staff comms, so a scheme launched now means staff ordering in time for winter delivery.
